Author Topic: Trump-Republican tax plan, Bad for large families  (Read 48719 times)

Offline Deal Guy

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Re: Trump-Republican tax plan bad for large families
« Reply #105 on: September 27, 2017, 06:37:45 PM »
At the individual level, of course it wont be hard to show that there is a difference between families with 1, 2, or 3 kids.
That is why i think it is important that people speak up and explain to congressmen why this needs to be addressed.
It's unfair to treat a family with 1 child the same as a family with 5 children. Bigger families have more expenses.

Offline hachover

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Re: Trump-Republican tax plan bad for large families
« Reply #106 on: September 27, 2017, 06:39:48 PM »
That is why i think it is important that people speak up and explain to congressmen why this needs to be addressed.
It's unfair to treat a family with 1 child the same as a family with 5 children. Bigger families have more expenses.

What if there is an enhancement to the child tax credit too that hasnt been shown publicly yet? Lets say it evened things out for families with 1-3 children in the household. Now it just becomes unfair for families with 4+. How much traction will you get?
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Re: Trump-Republican tax plan bad for large families
« Reply #107 on: September 27, 2017, 06:42:55 PM »
Another thing to point out, is that they are talking of raising the child tax credit somewhat, which is a good thing.
The thing is, that it doesn't offset taking away exemptions.

The reason for that is because, you don't get a penny of Child tax credit once your child turns 17, while exemtions work as long as the person is living in your house and you can claim them which can be much higher than 17.
So while they might want to show that the additional child tax credit offsets the loss of exemptions, that is totally not true for your 18 year old or 23 year old student that you need to feed.

Offline hachover

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Re: Trump-Republican tax plan bad for large families
« Reply #108 on: September 27, 2017, 06:48:14 PM »
Another thing to point out, is that they are talking of raising the child tax credit somewhat, which is a good thing.
The thing is, that it doesn't offset taking away exemptions.

The reason for that is because, you don't get a penny of Child tax credit once your child turns 17, while exemtions work as long as the person is living in your house and you can claim them which can be much higher than 17.
So while they might want to show that the additional child tax credit offsets the loss of exemptions, that is totally not true for your 18 year old or 23 year old student that you need to feed.

What youre saying is true, but again, it doesnt really resonate at the broadest levels. But I think if you add in the sandwich generation, qnd the loss of an exemption for older family memebers permanently residing in your home its a stronger argument.

Which can be put to rest by introducing an elder care tax credit
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Re: Trump-Republican tax plan bad for large families
« Reply #109 on: September 27, 2017, 06:53:55 PM »
I probably am sharing too much by saying this, but just to strengthen my point- by having no further benecit to including adult aged children on your tax form, it will encourage desirable behaviors. Once mom and dad get nothing by naming junior as a dependent the youngster will start to file their own forms. Thats not in order to generate revenue but desirable for purely social reasons.
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Re: Trump-Republican tax plan bad for large families
« Reply #110 on: September 27, 2017, 07:34:08 PM »
I probably am sharing too much by saying this, but just to strengthen my point- by having no further benecit to including adult aged children on your tax form, it will encourage desirable behaviors. Once mom and dad get nothing by naming junior as a dependent the youngster will start to file their own forms. Thats not in order to generate revenue but desirable for purely social reasons.
If they work, yes.
But how many are in college or yeshiva, and not working?
The parents still support the 18-23 year old, and get no help.

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Re: Trump-Republican tax plan bad for large families
« Reply #111 on: September 27, 2017, 07:53:35 PM »
https://www.forbes.com/sites/anthonynitti/2017/09/27/release-of-gops-long-awaited-tax-plan-reveals-exactly-why-tax-reform-is-so-hard/#380ba7604597

What Makes It Hard?  You may have noticed, however, that in the second example, I did not further reduce the taxpayer's income by the $4,050 personal exemption. This is because as part of the new framework, the GOP intends to do away with the deduction currently allowed to each taxpayer, his or her spouse, and each dependent child. Interestingly, by eliminating the personal exemptions, there will be a "tipping point" where large families would have been better of under current law, with a standard deduction of $12,700 (for married couples) and personal exemptions of $4,050 for each family member over the proposed standard deduction of $24,000 with NO personal exemptions.

To illustrate, assume a married couple with four children earning $40,000. Under current law, taxable income would be reduced by a $12,700 standard deduction and six personal exemptions for a total of $24,300, resulting in taxable income of $4,000, and a tax bill of $400.

Under the new framework, however, this same family would reduce income by only the new $24,000 standard deduction; no personal exemptions would be permitted. As a result, taxable income would be $16,000, and with the new bottom rate of 12%, this family would pay tax of $1,920, or $1,500 greater than under current law.

it appears, however, that the new framework is trying to ameliorate the impact of this tipping point by accommodating for the loss of personal exemptions by creating an enhanced child tax credit and even a $500 credit for non-child dependents, like an elderly parent. How much these credits help, however, won't be clear until more detail is provide as to just how they'll work. It is also very important to note that these changes to the tax credits don't appear to increase the amount of any credit that is refundable; as a result, if a low-income taxpayer has no tax liability, this won't increase the amount of their refund. Thus, the lowest-income of taxpayers will not be harmed by the changes, but won't benefit either.

SO PERHAPS WITH A $500 CREDIT FOR NON-CHILD DEPENDENTS, IT MAKES IT A BIT EASIER TO SWALLOW FOR LARGE FAMILIES?

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Re: Trump-Republican tax plan bad for large families
« Reply #112 on: September 27, 2017, 08:12:53 PM »
As for CHARITY, it may take a huge hit.
With the raise in the standard deduction, only people that have lots of mortgage interest over $24,000 will benefit from adding charity to their itemized deduction, or for people that give a lot of charity above $24,000. But for the small guy, that might have benefited from giving 5k or 10k to charity, that will no longer be a benefit.

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Re: Trump-Republican tax plan bad for large families
« Reply #113 on: September 28, 2017, 01:11:13 AM »
I was reading today that they plan to get rid of the $4050 exemption per person in the family, as i predicted.
But being that there will be alot of back and forth in congress regarding the tax bill, NOW IS THE TIME TO REACH OUT TO YOUR CONGRESSMAN AND SENATOR.
But that might be (at least partially) offset by a larger child tax credit.

Quote
Increase child tax credit: The framework calls for a "substantially higher" child tax credit, which today is worth $1,000 per child under 17. It will be up to lawmakers to determine how much higher to make it. In addition, it would raise the income thresholds for eligibility for the credit, meaning more people would qualify for it.
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Re: Trump-Republican tax plan bad for large families
« Reply #114 on: September 28, 2017, 01:22:12 AM »
But that might be (at least partially) offset by a larger child tax credit.

But exemptions work for anyone in your house that you are claiming no matter the age, since you are supporting them.
Making the child tax bigger is nice, but it's useless for anyone in your family over the age of 17.

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Re: Trump-Republican tax plan bad for large families
« Reply #115 on: September 28, 2017, 11:55:36 AM »
But that might be (at least partially) offset by a larger child tax credit.

If that credit is remains refundable, would be nice...

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Re: Trump-Republican tax plan bad for large families
« Reply #116 on: September 28, 2017, 12:07:23 PM »
But exemptions work for anyone in your house that you are claiming no matter the age, since you are supporting them.
Making the child tax bigger is nice, but it's useless for anyone in your family over the age of 17.
At the lower end (and possibly up to middle) of the income scale, I would guess that (refundable) credits are more meaningful than personal exemptions.
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Re: Trump-Republican tax plan bad for large families
« Reply #117 on: September 28, 2017, 12:30:03 PM »
As for CHARITY, it may take a huge hit.
With the raise in the standard deduction, only people that have lots of mortgage interest over $24,000 will benefit from adding charity to their itemized deduction, or for people that give a lot of charity above $24,000. But for the small guy, that might have benefited from giving 5k or 10k to charity, that will no longer be a benefit.
Loss of the state/local tax deduction makes it even worse for charity.
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Re: Trump-Republican tax plan bad for large families
« Reply #118 on: September 28, 2017, 12:37:49 PM »
Loss of the state/local tax deduction makes it even worse for charity.

How many Yidden are motivated by the tax benefit to give Tzedoko rather than the Mitzvah?

OTOH, maybe cutting out some of the "Charity" that goes to "Progressive" causes might actually be a good thing.

You've got to see the silver lining in everything.
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Re: Trump-Republican tax plan bad for large families
« Reply #119 on: September 28, 2017, 12:44:19 PM »
How many Yidden are motivated by the tax benefit to give Tzedoko rather than the Mitzvah?

OTOH, maybe cutting out some of the "Charity" that goes to "Progressive" causes might actually be a good thing.

You've got to see the silver lining in everything.

I was going to say something similar, but any big donors are still going to get the charitable deduction. The guy who gives $5k-$10k a year might not itemize anymore, but nothing changes for the 100k donors
I'm an optimist; but only because life isn't going to give me any other good choices.